SPECIFIC PROJECT

3 TO PIC : Comparative Study of

the Segments of
Tata Power Ltd.
TATA POWER
OBJECTIVES OF THE PROJECT

The main objectives of my project are that I will be abler

To know as to which segment is the best on thebasis of Revenue, Profit and on the
basis of effective utilisation of Capital Employed
To know asto which segment's performanceis pooron the basis of the same parametres
as stated above.
To give suggestions, after the analysis to the management.

NEED FOR SEGMENT REPORTING

All listed companics publish quarterly segmcnt performance teports. This is done to inform the stakeholders about the
progress made by cach segment of the company duringthe quarter. If any segment is not doing well, the reasons for
the same and the mcasures being taken are explained in detail This quarterly reporting keep the management on the
loes. They cannot cover up any poor performance of any segment. If poor perfomance continues for a long time, it
will be difficult 1o set the things right fo dhc segment. So, it is better to know the drawbacks and other reasons at the
carliest so that suitable remedial action is aken at he earliest.
PERIOD OF STUDY
Two yoars ending March 31, 2014 and March 31, 2015.
TOOLS OF ANALYS IS
() Common Sze Satements
() Comparatike Saements
(üi) Ratios

ABOUT THE COMPANY

TATA POWER LIMITED

Tata Power Limted was founded in 1910 by Mr Dorab Ji Tata with its headquarters in Mumbai The chairman of the
company is Mr. Natarajan Chandrasekaran and Mr. Praveer Sinha is the CEO and M.D. The company deals in Electric
Power generation and o Natural Gas exploration and their distribution.
 Founder Chairman CEO and MD
M Dorab Tata Natarojan Chandrasekaran 2016ha
Its electric geneta capacity ik 10 577 M
mesest power company, In Wer made significant
Welspun Renewawables for aa price
inroads market in India by facqusition ice of US SL3
billion. t is the
larges
Tata group holds around
of shares
st acquisition in the renewable sector.
fthe company. The equity shares are traded on both BSE and NSE.
SOURCE MATERIAL
TATA POWER LTD.
Segment wise Revenue, Profits and Capital Employod Cin Crores)
Year ended
Particulars 31-Mar.15 31-Mar-44
(Audited) (Audited)

Segment Revenue
(a) Power Business 25,420.37 25,492. 58
b) Coal Business 8,147.46 e,693.90
(c) Others 1,759.61 1.779.76
Total Segment Revenue 35,327.44 36.966.24
Less: Inter Segment Revenue 960.59 1,093.14
Revenuel Income from Operations (Net of Excise Duty) 34,366.85 35,873.10
Segment Results
(a) Power Business 4,202.05 3,732.84
b) Coal Business 926.07 1,069.41
(c) Others 39.22 31.11
Total Segment Results 5,167.34 4,833.36
Less: Finance Costs 3,699.27 3.439.90
Less: Exceptional Iterm-Power Business
Add / (Less): Unalocable incomel (Expense) (Net) 15.67 (418.39)
Profit Before Tax 1483.74 975.07
Capital Employed
Business
al Power 45,900.68 43 510.62
b) Coal Business 9,270.82 9,238.91
C) Others
Unallocable (38,750.95) (38,283. 85)
Total Capital Employed 17,691.48 15,630.73
PROCEDURE ADOPTED
() Common sze stalements for Revenue, Profit and Capital Employed will be prepared for the years cnding
March 31, 2014 and 2015. These will indicate the con tribution made by cach segment in Revenue, Profit and
also showing how they are using their respective share of Capital Employed. On the basis of this aralysis
some conclusion will be derived.
() Retun On Investment (ROI) and Net Profit Ratio wil be calculatod for cach segment for boh he years
ending March31, 2014 and 2015.
() Two Comparative Statements based on the ROl and Net Profit Ratio will be prepared to judge the performance
of thse segments. The relatives figures will help in deriving some good conclusion.
PROCESSING THE DATA
(0 Common Size Statement of Revenue
TATA POWER LTD.
Common Size Statement of Revenue
For the yoar ended March 31, 2014 (tin Crores)
Segment Revenue Amount () Percentage of Total Angles
(a) Power Business 25.492 58 68.96% 248
(b) Coal Business 9.693.90 2623% 95
(c) Others 1,779.76 481% 17"

Total 36,966. 24 100 360

68.96%

Power Business
2623%
Coal Business
Others

Pie Diagram depicting revenue share of various segments

Comments : Power Business is at the top in the year ended March 31, 2014
Cake ulation for Year 2014
25,492.58
"Power Business= 100= 68.96%
36.966.24

9.693.90
Coal Business= 36.966 24
x 100= 26.23%

Othes =
L.779.76
= 4,819%
36.966.24
 TATA POWER LTD.
Common Size Statement of Revenue
For the year ended March 31, 2015 Cin Crores)
Segment Revenue Amount ) Percentage of Total Angfes
(a) Power Business 25420.37 71.95% 259
(b) Coal Business 8,147.46 23.07%% 83

(C) Others 1,759.61 496%

Total 35.32744 100 360

71.95%

Power Busincsa
23.07%
Coal Business
Others

Pie Diagram depicting revenue share of various segments

Comments : Power Business is at the top if the yer ended March 31, 2015
Cakculations for Year 2015

Power Business 25420.37

35.32744
00 7195%
8,147.4
" Coal Business = 100 =23.07%
35,327.44
L.759.61
Others w100 - 4,98%
35,327.44

( Common Size Statement of Results (Profits)

TATA PoWER LTD
Comman Size Statemert Or Kess
For the year ending March 31, R in Crores)
Seament Profit Amount () Percentage of Total Angles
(a) Power, Business 3,732.84 779 2772*
(b) Coal Business 1.069,41 22% 792*

(c) Others 31.11 1% 3.6°

Total 4,833.36 100 360
 RPSRAKASH

T1%

22%

L1%
Others

Pe Diagram depicting share of profit contributed by each segment

Com ments : Power Business is at the top in the yoar ended March 31,2014
Caleulations for \ear 2014
3.732.84 x 100= 77%
Power Business
4.833 36
L069,41
Coal Business = 4,833 36 x 100 = 22%

31.11
Others g11 36-x 100- 1%

GOY
BARL
OY
Common Size Statemert of Results
For the year ending March 31, 2015 ( in Crores)
Segment Profit Amount () Percentage of Total Angles
(a) Power Business 4202 05 81.31% 292*

(b) Coal Business 926.07 17.92% 65

(C) Others 39.22 0.77% 3*
Total 5.167 34 100 360

81.31%

Power Business

17.82% Coal Business

Others

-077%
Pie Diagram depicting share of Profit contributed by each segment
Comments : Power Business is at the top in the year ended March 31. 2015.
 Calculations for year 2015
4.202.05
" Power Business x 100 = 81.31%
5.167.34
926,07
" Coal Business = 100 = 17.92%
5167.34
39.22
Others 100 0.77%
5.167.34
( ) Common Size Statement of Capital Employed
TATA PoWER LTD
Common Size tent of Capital
Employed
For the year ending March 31, 2014 (( in Crores)
Segment Capital Employed Amount () Percentage of Total Angles
(a) Power Business 43,510.62 80.70% 290
(b) Coal Business 9,238.91 17.14% 62

(c) Others 1,165.05 2.16% 8

Total 53,914.58 100

80.70%

Power Business

17.14% Coal Business

Others
2.36%
Pie Diagram depicting share of capital employed of each segment
Comments : Power Business is at he op in the year ended March 31, 2014
Calculation for Year 2014

" Power Business 43,510.6

53.91458
100 = 80.70%
9.2389T
. Coal Business 91458 100 = 17.14%

" Others
165.05 100 = 216%
S3914 s
TATA PoWER LTD.
Common Size Statement of Capital Employed
For the year ending March 31, 2015 (in Crores)
Se gment Capital Employed Amount (O Percentage of Total Angles
(a) Power Business 45,900,68 81% 291.6"
(b) Coal Business 9.270.82 17% 61.2"
(c) Others 1,270.93 2% 72*

Total 56.442.43 100 360

 A

Business is at lop in the

5900.6 - 8I%

sUMMAR SZES

tent. Net Profit R

TATA POWER LTD.

1March 31, 2014and 2015 Crores

1.37%
228

100
 RAKASHA
100 Power Business
90 Coal Business
80
Others
70
60
50
40
30 25.7%
20 T86%

10+ 336%
X
Power Coal Others
Busness Business
Segments
Relative Change in Net Profit Ratio

Cakulation of Net Profit Ratio : Formula for Net Profit Ratio

(a) For Year 2014
.Power Business = E x100 = 14%
25,492.58
Coal Business 106941 x100 1
9693.90
" Others31.ll
K100 = 1.75%
1779,76
(b) For Year 2015
Power Business 202.05
200 16. 58
25420

Coal Business 92607 x100- 11375%

8i47,46
Others 3922 00- 22
I759.61
(v) Comparative Statement of Segment wise Retum On Investment
TATA PoWER LTO
Compararative State etum On Investment
For the year ended March 31, 2014 and 2015 (in Crores)
Segnent 2014 2015 Absolute change Relative change
(a) Power Business 8.58% 9.15% 057 6.64%

) Co Bsiness 11.57% 9.99% (1.58) (13.65)%

(c) Others 27% 308% 038 14.07%

Focmula for Relative Absolute ChanE100

Changeevear figurs
 RSAKASH
100 Power Buniness

Coal Business
80
Others
60

40
30
20 1407%
10: 664%
Busnes
Ohers
10-4 Buaness
365%
20
Segents

Relative Change in Return on Investment

Cakkulation of Return on Investment : Formula for ROl
(a) For Year 2014
3,732.84
Power Business 100- 8S89%
43.510.62
,069,41
Coal Business 923891 l00= 157
31.11
Others 100-2.7%
L165,0
(b) For Year 2015
4.202.05
Power Business= 45,900 6 T009.IS%

Coal Business 926,97 00 999%

9220 9
92708
Ohers
39 22 to0-3.08%
1270.93

cONCLUSION
From the above analysis it appears that the Power Business is the best on all accounts. It's contribution
towards Revenue has improved from 68.919% in 2014 to 71.95% in 2015, Its contribution towards profit
has also improved from 7796 in 2014 to 81.31% in 2015. However, it seems to be using comparatively
higher share of Capital Employed both in 2014(80.796) and 2015 (816). There seems to be some excess
capital at the disposal of Power Business which can be used in other segments.
Share of Coal Business in Revenue has gone down from 26.58% in 2014 to 23.079% in 2015, and from
22% in 2014 to 17.9296 in 2015 in profit. This is not encouraging The excess capital employed in
Power Business can be shifted to Coal Business because of its better Net Profit Ratio, though its, ROI
is almost the same as that of Power Business